Accuray stock gains as B Riley starts coverage with buy rating, $7.50 PT

Jun. 23, 2022 1:35 PM ETARAYBy: Anuron Mitra, SA News Editor3 Comments

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Accuray (ARAY) stock gained as much as 9.6% to $2.11 in Thursday trading, after B Riley research initiated coverage on the radiation therapy company with a buy rating.

B Riley analyst Neil Chatterji gave ARAY stock a price target of $7.50, which is nearly four times that of ARAY's last closing price.

"We expect ARAY to see continued strong adoption of its precise and fast radiation therapy (RT) solutions driven by an ongoing shift toward fewer treatments and shorter treatment times, newer product traction - ClearRT, Synchrony, VOLO Ultra, CyberKnife S7 - and a robust pipeline in the ~$6B global RT market," said Chatterji.

ARAY shares, which are on track to post a four-day streak of gains, have shed nearly 60% YTD up to Wednesday, though Chatterji believes this loss as overdone, as the small- and mid-cap medical technology sector has been under pressure due to market and macro factors.

ARAY in April reported a Q3 beat on both top and bottom line, driven by a growth in quarterly gross orders.

"ARAY is benefiting from an aging system replacement opportunity in developed markets and a significant China growth opportunity," said Chatterji.

B Riley's buy rating is in contrast to a Wall Street average rating of strong buy, a Quant rating of hold and a SA Authors rating of sell.

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